BACKGROUND Nonalcoholic steatohepatitis (NASH) is common in morbid obesity. Our goal was to evaluate the alterations in liver histology and biochemistry before and after weight loss in 51 morbidly obese patients following Mason's vertical banded gastroplasty. METHODS Two biopsies were performed (on entry and after an average of 18 months), while 16 of these subjects had a third biopsy 17 months after the second. RESULTS On entry, steatosis and steatohepatitis (mostly grade 3) were present in 98.0% and fibrosis (mostly stage 2) in 94.1% of the subjects. After an excess weight loss of 66%, steatosis and steatohepatitis improved significantly (P<0.001). Although a significant overall decrease in fibrosis occurred (P=0.002), 21 patients (41.1%) did not change and only 6 patients (11.7%) increased in fibrosis. None developed cirrhosis. The decrease in steatohepatitis was significantly correlated (P=0.011) with the reduction of BMI. Fasting serum glucose, lipids, lipoproteins, transaminases, gamma-glutamyl transpeptidase, alkaline phosphatase and fibrinogen were also significantly improved at the time of the second biopsy. The third biopsy performed in 16 of the subjects showed further significant improvement in liver histology. CONCLUSIONS NASH improved significantly with massive weight loss in non-diabetic, non-alcoholic, morbidly obese subjects, while fibrosis improved in nearly half of the patients.